BUILDING THE CASE FOR CLOUD: HOW BUSINESS FUNCTIONS IN UK MANUFACTURERS ARE DRIVING PUBLIC CLOUD ADOPTION

Transcription

1 BUILDING THE CASE FOR CLOUD: HOW BUSINESS FUNCTIONS IN UK MANUFACTURERS ARE DRIVING PUBLIC CLOUD ADOPTION Industry Report Contents Executive Summary Context for the Sector Key Findings About the Research Why This Study? Recommendations

2 Executive Summary Innovative new technologies, unpredictable consumer demand and an unstable global economy means the UK manufacturing industry is at a particularly fragile juncture. Organisations are facing increasing pressure to deliver exciting new products and an impeccable customer experience on tight margins, without the security of knowing where their next order is coming from. As a result, many manufacturing organisations are turning to public cloud services in order to cope with the growing number of disruptions. Findings from a study from EMC, VCE and VMware showed that 85 percent of Line of Business (LOBs) decision makers in the industry use some form of public cloud services, amongst the highest of all the industry sectors surveyed. However, despite overall enthusiasm for the benefits that public cloud services can bring to a business, manufacturers are still concerned about security and data management issues. LOB decision makers cited worries about security exploits (50 percent), internal data loss (36 percent) and the reputational cost to the business of these services being breached (43 percent) as prime concerns. Just 8 percent of respondents said they had no concerns over using public services. So what should IT departments do to ensure their organisations can benefit from the scalability and efficiency of the public cloud, without risking security issues? The answer lies in a hybrid cloud approach, where the affordability, ease-of-use and scale of public cloud can be achieved, without compromising safety and compliance regulations, as business-critical applications remain in-house. 2

3 RAPID CHANGE IN MANUFACTURING 85% of Line of Business decision makers in the manufacturing industry use some form of public cloud services, among the highest of all the industry sectors surveyed The UK manufacturing industry has reached an exciting but unstable phase in its evolution. Technologies such as 3D printing, simulation software, big data and building information modelling (BIM) are allowing companies to innovate like never before. But according to the latest CBI Quarterly Industrial Trends Survey waning demand from home and abroad means the future is incredibly fragile. These figures echo wider economic indicators suggesting that demand is being depressed by the instability in China and broader global economy, as well as continued public spending cuts. 3

4 RAPID CHANGE IN MANUFACTURING Trying to take advantage of these innovations while balancing the risks is becoming increasingly difficult. Manufacturers can no longer rely on increased demand and need to consider new revenue opportunities, as well as ways to improve costsavings and efficiencies to existing processes. Technology can play a key role in enabling them to do so. Cloud services can enable businesses to run operations in a more agile manner and enable easy communication and collaboration between departments. Cloud technologies also mean that a manufacturer s infrastructure can be easily scaled up or down, helping manufacturers to follow surges and dips in demand for services or goods. Cloud services also offer a way to explore the potential of big data. Efficiencies and refining products and services based on customer feedback are just some of the ways in which big data analytics can provide valuable insights into new trends, business models and working practices, in order to drive growth and profitability. Thanks to their intuitive design, widespread availability and low cost barriers, many employees already know how to use these tools and aren t afraid to deploy them where they see the need. Cloudbased platforms provide a greater degree of precision and speed than the old systems often built by the manufacturers themselves as well as allowing cross-functional teams to work on new designs in real-time, sharing information to speed up innovation. This helps eliminate information silos that used to keep manufacturers bogged down with delays and errors. By sharing more data more often, manufacturers end up with fewer errors in initial product design and a more efficient supply chain, both of which lead directly to more profits once the product comes to market. The cloud is essential for fast-moving projects where lots of engineers and designers are rotating in and out of the project, but they need this in a single, secure platform. 4

5 Why this study? With these risks in mind, this study explores the views of over 100 decision makers and heads of departments from within manufacturing organisations, including accounting, marketing, HR and customer services, to capture the breadth of uses of the public cloud across the entire organisation. Commissioned by EMC, VCE and VMware, it identifies the motivations and rationale behind different departments within manufacturing organisations procuring public cloud services. This report aims to help IT departments in the industry find workable cloud solutions, which don t impede innovation but also keep the company s data safe namely, through adopting a hybrid cloud approach. The research was conducted by Opinion Matters between March 2015 and April 2015 among 604 decision makers / heads of departments across six industries. The aim of the study was to compare the influence and impact public cloud purchases have on department efficiency levels. 5

6 KEY FINDINGS WHICH EXTERNAL IT RELATED SERVICES DOES YOUR DEPARTMENT USE? organisations are embracing the public cloud: 85% of Line of Business (LOBs) decision makers in the manufacturing industry use some form of public cloud services, among the highest of all the industry sectors surveyed. Google App Engine 41% Amazon Web Services 24% Microsoft Azure 15% Local UK external IT service 32% WHICH OF THE FOLLOWING STATEMENTS BEST DESCRIBES YOUR / YOUR DEPARTMENT S INTERACTION WITH IT WHEN PURCHASING ANY EXTERNAL / PUBLIC CLOUD SERVICES: We run everything by them, including the final decision-making process We consult with them, but leave them out of the final decision-making process 9% 37% None of the above statements describe my / my department s interaction with IT 43% The majority of deployments are done in collaboration with IT departments Over three quarters (87%) of LOBs consult IT about public cloud deployments, with almost half (43%) running everything by them, including the final-decision making process. This was among the top three highest of all the industries surveyed

7 KEY FINDINGS HOW MUCH OF YOUR ANNUAL BUDGET DO YOU EXPECT TO SPEND ON IT RELATED SERVICES OVER THE COMING TWELVE MONTHS? 1,000-99, , ,999 1,000,000-1,499,999 17% 13% 13% DO YOU EXPECT THE AMOUNT SPENT ON IT RELATED SERVICES OVER THE COMING TWELVE MONTHS TO INCREASE WHEN COMPARED TO THE PREVIOUS TWELVE MONTHS? 21% 19% 16% YES 1-9% YES 10-19% NO stay the same LOB expenditure on public cloud is set to rocket Business functions expect to spend an average of 1,027,606 over the next 12 months on public cloud services. This is set to increase by 25% next year. WHAT DOES YOUR DEPARTMENT USE THESE EXTERNAL SERVICES FOR? Cutting costs and increasing efficiencies are the main reasons for public cloud deployment Platform to host digital applications and services (internal) 44% LOBs cite that the main drivers for deploying public cloud are to cut costs (33%) and drive efficiencies (29%). Almost half (44%) use it to host internal digital applications and services, such as HR, meeting scheduling and purchase management apps, with just over a third (37%) relying on it for data back-up and recovery services. This is closely followed by those using it to host external digital applications and services (35%). Platform to host digital applications and services (external) For data back-up and recovery services 35% 37%

8 KEY FINDINGS WHAT (IF AT ALL) ARE THE RISKS YOU PERCEIVE WITH USING IT RELATED PUBLIC CLOUD SERVICES BOUGHT FROM AN EXTERNAL COMPANY? Concerns remain over security and data management Despite overall enthusiasm for the benefits that public cloud services can bring to a business, manufacturers are still concerned about security and data management issues. LOB decision makers cited worries about security exploits (50%), internal data loss (36%) and the reputational cost to the business of these services being breached (43%) as prime concerns. Just 8% of respondents said they had no concerns about using public services. Security exploits Internal data loss Targeted cyber breaches 48% 29% 36% IT must be an enabler of innovation: The IT department should align itself with the business priorities of the entire organisation and find ways to help it meet the challenges of driving data use in a digital era in a safe, secure and scalable manner. 8

9 1 A 2 3 WHY LOOK TO A HYBRID CLOUD APPROACH? hybrid cloud approach offers the best of both worlds to organisations, by providing the flexibility, affordability, agility and scale of the public cloud, without compromising safety and compliance regulations. It ensures that business-critical applications remain in-house if required, while instantly provisioning the infrastructure from public cloud to cope with new projects and set up virtual servers to handle a new system. It can be scaled back just as easily when needed, a distinct advantage given the difficultly or sometimes impossibility of taking workloads back out of the public cloud. A true hybrid cloud allows organisations to use a common platform for seamlessly extending their existing data center to the cloud while leveraging the tools, existing security policies and processes that they already use on-premise. HOW TO GET STARTED WITH A HYBRID CLOUD DEPLOYMENT: Get used to the idea of not building all the IT services internally The IT team should instead be focused on managing the consumption of services from multiple service providers, including their own internal functions. Think about possible future data sets For instance, the Internet of Things could bring new potential data streams to the organisation so it is important to consider how this could one day be integrated into your hybrid cloud environment. Design every integration with security at front of mind Ensure you are able to manage the identities of the users you want to have access. Simplicity should be front of mind So the whole process can be easily repeatable. Engaging a specialist service integrator to ensure this simplicity as a blueprint may be the best approach. Select an integrator with a proven track record Look at development and testing as a starting point A hybrid cloud makes it possible to quickly develop and test applications in the cloud and easily move them to onsite production if required. It s an easy, fast, and cost-effective way to gain on-demand capacity for a limited time period. Ensure disaster recovery is built in Many departments do not have the budget, expertise or time to develop a disaster recovery plan. Disaster recovery in the cloud is emerging as a compelling alternative due to the flexibility in commitment, capacity and cost. Of the specific integration your business is looking for and make your assessment outcomes-based, (rather than time and materials). 9

10 With secure, flexible and manageable access to public cloud data through a hybrid cloud approach, the entire organisation can focus on surviving and thriving within the exciting, fast-paced era of digital enterprise. Click here to find out more About EMC EMC Corporation is a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset information in a more agile, trusted and cost-efficient way. Additional information about EMC can be found at About VMware VMware is a global leader in cloud infrastructure and business mobility. Built on VMware s industry-leading virtualization technology, our solutions deliver a brave new model of IT that is fluid, instant and more secure. Customers can innovate faster by rapidly developing, automatically delivering and more safely consuming any application. With 2014 revenues of $6 billion, VMware has more than 500,000 customers and 75,000 partners. The company is headquartered in Silicon Valley with offices throughout the world and can be found online at About VCE VCE provides converged solutions that accelerate the adoption of cloud-based computing models for enterprises and service providers globally. Based on VCE s industry-leading converged infrastructure, VCE converged solutions dramatically simplify IT, enabling customers to focus on business innovation instead of integrating, validating and managing IT infrastructure. About Opinion Matters Opinion Matters is an award winning insight agency, providing consultancy and market research solutions for businesses, organisations and agencies in the UK and overseas. Founded in 2000 as a communications driven research specialist, our expertise is now also key to providing foundations for creating business strategies, gaining insight on perceptions, collecting audience intelligence, providing product development insight, or establishing reaction and need created by compliance and legislation. 10

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